Monday, 4th December 2023

Students loan scheme: Good move

By Ray Ekpu
04 July 2023   |   3:01 am
June 12 is a date that Nigerians remember sadly as the day on which one of the freest election ever conducted in Nigeria happened and then was aborted by the Ibrahim Babangida administration. Now we have another reason, a pleasant one, to remember June 12. [ad] June 12, 2023 was the date that President Bola Tinubu signed into law the access to higher education bill. This was in keeping with his campaign promise to liberalise the funding of higher education in the country.

student loan

June 12 is a date that Nigerians remember sadly as the day on which one of the freest election ever conducted in Nigeria happened and then was aborted by the Ibrahim Babangida administration. Now we have another reason, a pleasant one, to remember June 12.

June 12, 2023 was the date that President Bola Tinubu signed into law the access to higher education bill. This was in keeping with his campaign promise to liberalise the funding of higher education in the country. The bill titled: “A bill for an Act to provide for easy access to higher education for Nigerians through an interest-free loan from the Nigerian Education Bank established in the Act to provide education for Nigerians and other purposes connected thereto,’’ was sponsored by the former Speaker of the House of Representatives, Femi Gbajabiamila who is now the Chief of Staff to the President.

Education Bank has however been replaced with Education Loan Bank in the Act. Gbajabiamila took the Bill to the House in 2016 but it was not passed until this year and during the signing of the bill into an Act, the author of the bill was right by the President’s side as his Chief of Staff coincidentally. It is a pity, a big pity, that it took all of seven years for such an important bill to get the nod of the National Assembly. But it is better late than never.

On June 13, a day after the signing of the bill into law, the leadership of the National Association of Nigerian Students (NANS), paid Tinubu a courtesy call to thank him for signing the bill into law. On that occasion Tinubu said: “Poverty should not prevent anybody, any child, including the daughter or son of a wood seller, boli (plantain) seller or yam seller from attaining their highest standard of education, to eliminate poverty.”

Both Gbajabiamila and Tinubu come from the South West, a region where education, especially free education, is much appreciated. Both of them also went to school in America where education is much appreciated and loans are available for students who need to actualise their education dreams. Both men deserve the commendation of all education loving Nigerians, all poor parents and all indigent students. They now have a lifebouy; they can swim in the ocean of higher education to reach the shores of their ambition.

The funding of the project has been articulated in the Act: 1% of profits from oil sales, other mineral resources, 1% of taxes, levies and duties from Inland Revenue Service, Nigerian Immigration Service, Nigerian Customs Service, education endowment fund and public goodwill. The applicant’s family must be poor, so poor that it must not earn more than N500, 000 a year. With the decline, sharp decline, in the value of the naira and the rising cost of every item in the market that figure may need to be reviewed upwards in the nearest futur

The composition of the Board is well selected with the CBN Governor as the Chairman and a Secretary to be chosen by the Chairman. Other board members are ministers of education and finance, auditor general of the Federation, chairman of National Universities Commission, representative of Vice Chancellors, representative of Rectors of Polytechnics and of Provosts of Colleges of Education, Nigeria Labour Congress, Academic Staff Union of Universities (ASUU).

The loan beneficiary must provide a guarantor who must be a lawyer of not less than 10 years at the bar, a civil servant of not below grade level 12 or a Justice of the Peace. The penalty for defaulters is N500, 000 or a two-year jail term. Payback time is two years after NYSC. This provision is a bit tight because two years is not enough for a graduate to get a job in today’s tight job market.

According to a report in the Punch of June 21, 2023 the Nigerian Graduate Report 2022 is that 59.9% of HND graduates, 49.55% of OND graduates and 39.75% of bachelor’s degree holders are unemployed. The National Directorate of Employment says that majority of Nigerian graduates remain jobless five years after NYSC. The job market is tight today.

A number of companies have folded up. Some others have relocated to other jurisdictions. Some job seekers with skills have relocated to other countries where jobs are easily available. That makes a two-year repayment period tight. Five years may be more acceptable. However, it is better to start implementing the programme so that the real problems on the ground may be experienced which can then form the basis of a review.

There are various views on the programme expressed by various interest groups. The students say they don’t want an ASUU representative on the board. I don’t see why ASUU should not be on the board. In a recent remark, the ASUU President, Professor Emmanuel Osodeke, was on the side of the students on the issue of an increase in fees. He said: “We are not in support of any move to hike fees as it may force many students out of school.” But the truth is that government’s revenue today is low, government’s debt is high. We are told that the government spends over 96% of its revenue on debt servicing.

“With this Act, the enrolment figures in tertiary institutions is likely to rise exponentially. The government will need to expand the facilities in its institutions to accommodate the influx. Such expansion will cost money. As things are now the government must think of new ways of raising revenue as well as cost-cutting measures. Such revenue-raising strategies should include the sale of some marginal assets such as marginal fields, sale of assets seized from corrupt public officers, the rejuvenation of solid minerals industry and the increase in exports promotion of processed agricultural products.

The cost-cutting measures may involve the merging of government ministries, parastatals and agencies or the scrapping of some of them completely. Most government organisations in Nigeria are not run with a profit motive in mind. That is why they are mired in corruption and mismanagement. The philosophy should be “the leaner the better.”

The tertiary institutions should be encouraged to establish endowment funds and consultancy services where appropriate. These facilities can also provide part time jobs for their students and should be able to fund the studies of their very brilliant but indigent students as it is done in some developed countries such as the United States, Germany, Switzerland and United Kingdom.

As things are in Nigeria today, it will be very difficult for the Federal and State Governments to provide tuition-free education. Education is getting costlier with improved technology in the education sector. If the right quality of education must be offered, the right kind of funding must be in place. Private organisations, companies, faith-based facilities, charitable institutions and philanthropists must also participate in funding education, especially the student segment of it. These organisations are by and large the beneficiaries of the products of higher education.

In the past, Nigerian students used to benefit from scholarships awarded by local governments, state governments and the Federal Government. These scholarships have shrunk to the point of not being available at all today. The Western Region and the Midwest region funded education immeasurably in the 60s and 70s. Chief Obafemi Awolowo is remembered today largely because of his free education programme in the former western region.

Many of the technocrats and big business owners from that region are products of Awo’s free education programme. Subsequent governments in that part of the country were compelled by the precedent set by Awo to continue the programme in one form or the other. Those leaders that did not do so got into trouble with their citizens because a tradition of free education had become something like a birthright in the South West region.

During the 1979 presidential election, education was one of the talking points adopted by two of the leading parties. While the UPN promised free education, the NPN talked of qualitative education. Infact, Awo used to carry a blackboard to the campaign venues and do some number crunching to prove that free education was achievable. The economy at the time was strong so it was probably achievable. But it is a pity that the man did not win the election otherwise our country would possibly have been a first-world country by now.

Many parents go through a lot to send their children to school. Some of them sell their property, some go abegging, some deny themselves some of life’s little pleasures; others send their daughters into marriage so that they can use the dowry to pay for their boys’ school fees. That is why many girls remain uneducated while the boys go to school in families of the poor.

Now, there is a way out. Children of both sexes can go to school through this loan scheme. No parent can have any excuse now for sending their girls into marriage instead of sending them to school. But the project can only survive if the borrowers refund the interest-free loan when it is due. This is a revolving loan and its sustainability depends on the prompt repayment by the borrowers. This is not an awoof, a free gift by the government. It is a business transaction that is supposed to elevate the borrower from the prospect of poverty into the pantheon of potentially prosperous human beings on earth.


Education is a poverty killer. It is a transformational tool, a tool for survival and sustenance. It provides a level playing field for everybody, rich and poor, boys and girls. It is a game changer. When you have it nobody can take it away from you. And you cannot give it out to anybody. You can’t.

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